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BARCELONA, SPAIN – MARCH 2: The logo of Amazon ads, an advertising solutions service formerly known as AMD or Amazon Marketing Services, during Mobile World Congress 2023 on March 2, 2023. in Barcelona, Spain. (Photo by Joan Cross/NurPhoto via Getty Images)
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Amazon turned into the Internet to the juggernaut in recent years, brands have been paying big bucks for premium placement on retailer websites. Amazon now allows other sites to use its ad technology for their own stores.
The new offering, called Amazon Retail Ad Service, allows businesses to serve “contextually relevant ads at the right place and time” in search results, product pages and other parts of its site, Amazon said Thursday.
It is initially available to US retailers, who will pay fees based on usage levels. Prices are not disclosed.
Amazon in 2022 began punching through ad revenue in its quarterly earnings reports, showing that the business has become a significant contributor to the company’s top and bottom lines. Advertising revenue in the most recent quarter was $14.3 billion, ranking third Alphabet and Meta in digital advertising.
That’s still far less than Amazon’s sales from online shopping and cloud computing, which totaled $61.4 billion and $27.4 billion, respectively. quarter which ended in October.
The bulk of Amazon’s advertising revenue comes from sponsored product advertising, which is keyword-targeted advertising that allows brands to promote specific products. Amazon stuffed more of these sponsored items into search results and product pages over time. It also generates some ad revenue through video streaming.
With Amazon Retail Ad Service, users will be able to customize the design, placement, and number of ads displayed on their sites, as well as use Amazon’s tools for ad measurement and reporting.
Amazon said the service runs on systems that are separate from its own retail business, and retailers manage their data through AWS accounts.
The service could provide Amazon with valuable data that it can use to strengthen its predictive ad and recommendation technology. The company said early customers include health and wellness retailer iHerb, Asian grocery startup Weee! and Oriental Trading Co., which sells toys, party supplies and crafts.
“We designed this to be a win-win for retailers, advertisers and shoppers, and we look forward to seeing how it improves results, drives sales and improves the shopping experience,” said Paula Despins, vice president of Amazon Ads Measurement. in a press release.
The announcement came just days before the National Retail Federation annual exhibition.
This is not the first time Amazon has sold its own technology and services to third parties.
Amazon Web Services began as a cloud infrastructure to support online retail businesses. The company launched AWS as a business in 2006. In 2022 company launched Buy With Primewhich integrates Amazon’s payment and fulfillment services for other retailers.
